We had a similar report for the JeOS-raspberrypi2 Contrib image recently on opensuse-arm mailing list. Can you confirm that the image rebooted okay before updating? That would rule out a Kiwi issue. I'm also assuming that you did not tweak mount points or play with symlinks? Also please confirm that you see neither a colored screen nor U-Boot output. Lack of output on boot (only red LED) may be a symptom of overheating. Please share a directory listing (ls -l) of the first partition (FAT) on the image after update. It should have a config.txt file referencing u-boot.bin and a u-boot.bin file, among others. Note that it may be different from /boot/vc/config.txt on the second partition (ext). Both the 4.7.x Factory kernel and 4.8.rc5 from Kernel:HEAD work fine for me.